A new analysis suggests an Apple-Microsoft deal to bring Bing search to the iPhone could carry great risks for Apple, which has formed an identity by disparaging the Windows platform in its "Get a Mac" ads.

A team of analysts from Oppenheimer offered their insight in a research note to investors Wednesday. Breaking down the implications of a Bing search agreement between Apple and Microsoft, the analysis was provided in response to an earlier report alleging that the two rivals are currently in talks to replace Google as the primary search provider for the iPhone, as well as the Safari browser.

Analyst Yair Reiner said the battle lines have been drawn between Apple and Google, though "overt warfare" between the two companies has yet to erupt. He said that the companies are at odds because Apple seeks to be the "special box in a world of generic services," while Google aims to become the "special service in a world of generic boxes." Now, it's possible, Apple's enemy in Microsoft could become its friend with a Bing partnership.

"Cozying up (to Microsoft) could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner wrote.

For Google, such a deal would be negative in the long-term, but shouldn't come as a surprise to those who watch the technology industry. Analyst Jason Helfstein said users will likely still be able to change the default settings on their device, or download the Google Apps software.

As for AT&T, the exclusive carrier of the iPhone in the U.S., analyst Tim Horan said the discussion serves to highlight the loss of control the wireless provider has over its customer base, thanks to Apple and the iPhone. AT&T is on the losing end because it does not receive any of the revenue associated with software on the App Store, yet is the use of many of those applications that has resulted in poor network quality.

"We believe this will intensify the service providers' promotion of alternative handset suppliers and their own applications market," Horan wrote. "We would expect the service providers to work more intensively with Google, Nokia, RIM etc. to create devices that are comparable to the iPhone, but this will take some time."

Microsoft analyst Brad Reback with Oppenheimer said Microsoft's desire to grow the Bing brand and increase its market share by any means indicates the Redmond, Wash., company would be willing to strike a deal with Apple for the right price. He noted that Microsoft has already released a Bing application for the iPhone.

"We believe (Microsoft) will not grossly overpay so as to negatively impact the future profitability from such a deal," Reback said. "As a reminder, MSFT recently replaced (Google) as (Verizon's) default search engine in a five-year deal estimated to be worth $500M."

Speculation of a potential Apple deal for Bing has arisen in the past, due to the growing tension between the iPhone maker and Google. Some have speculated that Apple could look to remove Google's presence entirely from its devices.

While Apple's non-acceptance of the Google Voice application into the App Store highlighted the differences between the two companies, it could be a sign of things to come. Last year, Apple revealed it was looking to hire someone to create a new and improved Maps application for the iPhone. The current mapping software is powered by Google.

Combined with Apple's purchase of Google Maps competitor Placebase last summer, there remains ongoing chatter that a new Maps application created by Apple could appear in a forthcoming update to the iPhone operating system.

Search is search, as long as the end user gets decent results and can get to what it is they are looking for, I don't see the bi(n)g deal. Chill out---besides the Bing! app itself is nice and there is a Google app if their is that much concern. Common sense should prevail here.

This guy Reiner is clueless. I say good for apple, and the world if someone can put and end to google's dominance, their dictatorship over who appears and who doesn't on the web. If it has to be bing (what a name....tststst...) so be it, although I would go with yahoo, and altavista specifically.

A new analysis suggests a Apple-Microsoft deal to bring Bing search to the iPhone could carry great risks for Apple, which has formed an identity by disparaging the Windows platform in its "Get a Mac" ads.

...

"Cozying up (to Microsoft) could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner wrote.

Apple would risk clashing with its brand identity? I fail to see how. If that were the case, why does Apple continue to offer Office for Mac (when Apple itself offers iWork) and Boot Camp to run Windows (when Apple itself offers OS X) for its products? Partnering with Microsoft to bring Bing (an internet search engine) to the iPhone pails in comparison to the two aforementioned capabilities.

Apple would risk clashing with its brand identity? I fail to see how. If that were the case, why does Apple continue to offer Office for Mac (when Apple itself offers iWork) and Boot Camp to run Windows (when Apple itself offers OS X) for its products? Partnering with Microsoft to bring Bing (an internet search engine) to the iPhone pails in comparison to the two aforementioned capabilities.

I agree 100%. They already work with microsoft so it's not THAT big of a deal, although when you buy a stock mac you don't see any microsoft logos anywhere, whereas a stock iphone would have bing right there in safari (and the iphones superior mobile browser is a big selling point to a lot of people)

Search is search, as long as the end user gets decent results and can get to what it is they are looking for, I don't see the bi(n)g deal. Chill out---besides the Bing! app itself is nice and there is a Google app if their is that much concern. Common sense should prevail here.

I agree that people are getting their panties in a twist over nothing here, but not with your assessment of Bing.

Personally, I don't know any one who searches from that impossibly small, useless field in the mobile Safari bar and I'd think it a bonus to the UI if it was removed. If you want to search on the iPhone, the Google app is far better for the purpose and seamlessly passes control over to Safari once the search is done. Dedicated apps for search (not the browser), are definitely the best way to go on mobiles.

The Bing app is already available so all we are talking about here is Microsoft being added to the list of search providers in mobile Safari and maybe being the default when you first fire up the phone. Who cares really?

Who "wins" in mobile search on the iPhone will ultimately come down to who has the best app and despite the bad design of the Google app in some respects, Bings app is far stupider and harder to use effectively IMO. If Google can give the best search results, and keep on top with the best search app, they don't have anything to worry about at all. It's Microsoft that will end up paying through the nose for a position on the iPhone that won't really do them much good beyond growing a bit of brand recognition.

If Verizon signed a contract with Microsoft, does that mean if they are to bring the iPhone to their network, it would be obligated to use Bing? Perhaps this is the reason for this discussion? Google could remain the default on AT&T and everywhere else in the world.

On the other hand, I don't think Version WebOS or Android devices are forced to use Bing, right? (disclaimer: i'm Canadian, so I have no clue)

I don't want a new map application! I like google's mapping software. I don't want to be forced into changing!

The iPhone's Maps applications is made by Apple. Google merely delivers the content. There's no mention of Google inside the app. One could imagine the same happening with Search in Safari. Google search will turn into Apple Search, with MS delivering the content.

If it's coming from an analyst, I have no doubt they feel that by starting this rumor, they can manipulate the stock market and get some free cash from Apple's stock... by shorting it Rinse and repeat.

Yea, i think Apple should just stick to Google. Bing sucks, its not any different than the Live.com search. They just slapped a new name on it. Its still the same sucky search engine. Apple should stick with Google or make their own search engine.

"AT&T is on the losing end because it does not receive any of the revenue associated with software on the App Store, yet is the use of many of those applications that has resulted in poor network quality."

So AT&T will just have to take it's monthly subscription fee, not upgrade thier network and be happy with it. This is the most disengenuous statement I've heard in a while.
Talk about double dipping.

I agree that people are getting their panties in a twist over nothing here, but not with your assessment of Bing.

Personally, I don't know any one who searches from that impossibly small, useless field in the mobile Safari bar and I'd think it a bonus to the UI if it was removed. If you want to search on the iPhone, the Google app is far better for the purpose and seamlessly passes control over to Safari once the search is done. Dedicated apps for search (not the browser), are definitely the best way to go on mobiles.

The Bing app is already available so all we are talking about here is Microsoft being added to the list of search providers in mobile Safari and maybe being the default when you first fire up the phone. Who cares really?

Who "wins" in mobile search on the iPhone will ultimately come down to who has the best app and despite the bad design of the Google app in some respects, Bings app is far stupider and harder to use effectively IMO. If Google can give the best search results, and keep on top with the best search app, they don't have anything to worry about at all. It's Microsoft that will end up paying through the nose for a position on the iPhone that won't really do them much good beyond growing a bit of brand recognition.

A separate app for searching the web, what's wrong with the UI of mobile safari?

Quote:

Originally Posted by bartfat

If it's coming from an analyst, I have no doubt they feel that by starting this rumor, they can manipulate the stock market and get some free cash from Apple's stock... by shorting it Rinse and repeat.

Who cares if Google has Android? It seems to be racing against itself to fall into the Windows Mobile trap - with dozens of slightly different OS versions and hardware configurations in the wild, snapping up niches to be sure, but not offering a compelling 'switch' case to Apple's core market.

Who cares if Google has Chrome? It's, once again, aimed directly at commodity hardware and the internet. It's not going to offer the integrated, consistent experience that Apple creates and sells for a premium. And Google's not going to be nearly as strict with its suppliers as Apple, leading to many of the same inconsistent performance and expectation problems of the Windows market. These are core features to Apple's market and they're not going to leave for Chrome any more than they'll leave for Windows 7.

I bet the Google/Apple 'split' -- evidenced by nothing more than Schmidt leaving Apple's board -- had far more to do with the FTC investigation than any rift or rivalry. The Google Voice thing is a red herring. Google Voice has reliability issues. It mucks up expectations (see: SMS/MMS routing). Did the relationship chill, or did Apple simply not want to see the press filled with people blaming Apple for the slightly-kludgy system and inconsistent performance?

What would make more sense is making Bing the default search, but offering an easy option to set whatever search you would like in the settings (Google, Ask, Yahoo, etc.). It would be too abrupt to just oust Google outright.

A separate app for searching the web, what's wrong with the UI of mobile safari? ...

A dedicated app is always going to be better. Voice search is one of the obvious advantages. It's also just plain faster to hit the Google button than it is to launch Safari, and then find the tiny search field with your finger.

What would make more sense is making Bing the default search, but offering an easy option to set whatever search you would like in the settings (Google, Ask, Yahoo, etc.). It would be too abrupt to just oust Google outright.

Besides the fact that Bing coming from MS, it is by far inferior technology (compare to Google). I can not see Apple in right mind forcing all iPhone users to use something which is not best of the best ( and is not coming from Apple ). I do hope that all this hubbub is abut iPhone OS 4.0 adding Bing as one of choices of Search Engines.